Why Shanghai Real Estate Is The Most Obvious Bubble Ever

[Mustank]

China is rich. But what is the use of it when it is plagued with wickedness?

 

A village that relies on child beggars

http://www.asiaone.com/News/Latest%2BNews/...209-262695.html

[Jim]

im one of the "those" who bought my flat in 1997 n sold 3 yrs ago.... made almost 90% before deducting the interest n other misc fees...

 

1997 was not the peak. 1996 was the peak, especially for resale flats. I cant remember the exact numbers, but resale HDB flats in Bishan were going for over half a million in 1996, not too different from current prices. That's a 15 year wait, just to break even. Anyway, you probably bought direct from HDB which is the only pao jiak because the HDB is the only property developer that can afford to let flats stay vacant rather than sell at a discount and has 30k+ or so "market discount" priced in. But I also remember back then the waiting time for new flats back then was 7 years or more with stories about elder sisters queueing up for flats for the brothers still in secondary school.

 

That was a mad era so many conveniently forgot.

 

If you bought your flat from elsewhere, then I have to say you had a very good deal.

 

The current cooling measures is so gentle compared to the aggressive cooling measures announced in 1996 by LHL... almost like they are afraid they might overdo it and see a repeat of the aftermath of 1996 cooling measures meeting Asian Financial Crisis in 1997.... and even then the private property market still tong until 1998 before collapsing.

[Tigershark1976]

1997 was not the peak. 1996 was the peak, especially for resale flats. I cant remember the exact numbers, but resale HDB flats in Bishan were going for over half a million in 1996, not too different from current prices. That's a 15 year wait, just to break even. Anyway, you probably bought direct from HDB which is the only pao jiak because the HDB is the only property developer that can afford to let flats stay vacant rather than sell at a discount and has 30k+ or so "market discount" priced in. But I also remember back then the waiting time for new flats back then was 7 years or more with stories about elder sisters queueing up for flats for the brothers still in secondary school.

 

That was a mad era so many conveniently forgot.

 

If you bought your flat from elsewhere, then I have to say you had a very good deal.

 

The current cooling measures is so gentle compared to the aggressive cooling measures announced in 1996 by LHL... almost like they are afraid they might overdo it and see a repeat of the aftermath of 1996 cooling measures meeting Asian Financial Crisis in 1997.... and even then the private property market still tong until 1998 before collapsing.

 

 

Im not too sure when is the peak, just answering Kusje question... he is the one mentioned 1997. My house was bought from open market. There wasnt any new flat at Yishun in 1997.

 

Anyway, I have never come across anyone in SG that loss money over HDB if he holds long enough. As for your example of bishan house that was bought at 1/2 a mill in 1996 and needed 15 yrs to break even... are u the owner or u just hear say from people?

 

from what i undestand, those who bought their HDB in 1996 should have earned around 20% to 30% over their purchase price by 4th quater of 2010. you may refer to the link below:

 

http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/...Document#Detail

 

 

[Yeshe]

Very low chance of that happening cos those commies pay cash.

 

Thats right they dont take any loans.

 

the problem is not sub prime, the problem is, when those foreign investor decides to pull out the funds, then the mkt will crash

[Chengwh492]

the problem is not sub prime, the problem is, when those foreign investor decides to pull out the funds, then the mkt will crash

 

now that you see the permabears are all bullish in property and people talking big big about their 'semi-d bungalow' reach 500%, it should happen soon.

 

lets see where these leveraged sinkies going to mrt stations, maybe a good chance to reduce population too.

 

[relacker]

...

 

Once erection over, the gov will need to show cause that the gov is GOOD and Capable to bring prosperity and wealth onto Singapore for the overseas investors and general public and to keep attracting FT/PR.

The gov will die die have to continue the same policies and governance to make Singapore more lively and properties will keep appreciating to attract more FT/PR and investments and to create a vibrant nation!

Everyone is vested in HDB and private prop....the gov will not let us die cruelly.

So why worry about properties ever crashing and killing the entire Citizens.

If someone say its possible......then I got nothing to say....that is your opinion.

But many others like me knows that its 99.999% not possible for the gov to crash the market and let everyone die loh!

...

 

 

when erection over, why die die must do for citizens? did any of the policies actually do for citizens or to boost their own coffers to justify salary???

[Wind30]

from what i undestand, those who bought their HDB in 1996 should have earned around 20% to 30% over their purchase price by 4th quater of 2010. you may refer to the link below:

 

http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/...Document#Detail

 

you know why? that is because HDB price is at an ALL TIME high.... no matter when you bought your flat, you sell today, you will make money.

 

errr.... but is that supposed to encourage people to buy HDB?

[Ahhia]

better for our dearest govt to massage the bubble;

housing supply more elastic to price, reduce lag from launch to TOP

regulate credit boom-> LTV, stamp duties,

media role in building bubbly expectation discourage

clear and consistent msg from govt on housing supply n targeted price index

provide toilet papers to clean backside when extended period of high interest rate comes, esp those on ARMs.

 

 

 

 

[Jim]

Not debating, just providing citations for what I mentioned,

http://www.aboutsingaporeproperty.com/resa...hit-new-high-3/

 

You're right in that breakeven point was much earlier, probably in 2008, but we're still talking about a 12 year wait, bubble peak to breakeven.

 

Nonetheless, maisonettes in Bishan were going for as high as $730k even in 1997:

 

http://finance.dir.groups.yahoo.com/group/...ge/message/3947

[Tigershark1976]

 

You're right in that breakeven point was much earlier, probably in 2008, but we're still talking about a 12 year wait, bubble peak to breakeven.

 

My post is actually answering your earlier question... is just to tell u that a property in SG doesnt need 15 yrs to break even, thats all... and btw, we are taking EXTREME cases to compare here. 1996 was the hitorical peak and after than, there were series of major economy crisis around, u name it, 1997 Asian Econimy Crisis, IT bubble, Sars, H1N1, and recent world financial crisis... if you if the home owner bought the house a few yrs later, or a few yrs earlier, the net profit that the owner could get is much higher than this!

 

Nonetheless, maisonettes in Bishan were going for as high as $730k even in 1997:

 

so what a Bishan EM can fetch 730k in 1997? will you drop your Jaw if I told you that there was an EM in Bishan that was sold at 900k last year? it was even dicussed in this forum...

[Jim]

You're right in that breakeven point was much earlier, probably in 2008, but we're still talking about a 12 year wait, bubble peak to breakeven.

 

My post is actually answering your earlier question... is just to tell u that a property in SG doesnt need 15 yrs to break even, thats all... and btw, we are taking EXTREME cases to compare here. 1996 was the hitorical peak and after than, there were series of major economy crisis around, u name it, 1997 Asian Econimy Crisis, IT bubble, Sars, H1N1, and recent world financial crisis... if you if the home owner bought the house a few yrs later, or a few yrs earlier, the net profit that the owner could get is much higher than this!

 

Nonetheless, maisonettes in Bishan were going for as high as $730k even in 1997:

 

so what a Bishan EM can fetch 730k in 1997? will you drop your Jaw if I told you that there was an EM in Bishan that was sold at 900k last year? it was even dicussed in this forum...

 

Well, the key point a few us are making is that

1) We are in a property bubble... so my jaw wont drop because having seen so many bubble mania, it doesnt shock me any more

2) HDB is not pao jiak if you buy at bubble peak.... unless you can wait until another bubble peak, if it ever comes again

 

Besides, the crises werent necessarily a bad thing for property:

 

Asian Financial Crisis: The unrest in Indonesia means a lot of tycoons had to seek refuge in Singapore.

 

Tech Bust: Tech bubble didnt directly fuel the property market... in fact it was sucking money out of property and into tech stocks, but to rescue the mess of the tech bubble bust followed by 9/11, Greenspan sent US effectively into Zero Interest Rate and created the US housing bubble.

 

Global Financial Crisis: Same thing, sent US back to Zero Interest Rate policy AND followed by QE and QE2 as well as a synchronised stimulus measures by governments throughout the world

 

There are also a few things that happened in Singapore:

 

1) Opening of two new IRs

2) Population increase from 3 million to 5 million

3) China exporting deflation for food and manufactured products

 

So has the past 10 years been especially bad for property? I dont think so. And given our population density, we should get used to regular SARS and H1N1 scare.

 

And there is a big shoe yet to drop. Wikileaks confirmed what everyone else knew before. Saudi exaggerated the size of their oil reserves by 40%. A remake of the 70s movie "Oil Crisis" is akan datang.

Edited February 11, 2011 by Jim

[Tigershark1976]

Well, the key point a few us are making is that

1) We are in a property bubble... so my jaw wont drop because having seen so many bubble mania, it doesnt shock me any more

2) HDB is not pao jiak if you buy at bubble peak.... unless you can wait until another bubble peak, if it ever comes again

 

Besides, the crises werent necessarily a bad thing for property:

 

Asian Financial Crisis: The unrest in Indonesia means a lot of tycoons had to seek refuge in Singapore.

 

Tech Bust: Tech bubble didnt directly fuel the property market... in fact it was sucking money out of property and into tech stocks, but to rescue the mess of the tech bubble bust followed by 9/11, Greenspan sent US effectively into Zero Interest Rate and created the US housing bubble.

 

Global Financial Crisis: Same thing, sent US back to Zero Interest Rate policy AND followed by QE and QE2 as well as a synchronised stimulus measures by governments throughout the world

 

There are also a few things that happened in Singapore:

 

1) Opening of two new IRs

2) Population increase from 3 million to 5 million

3) China exporting deflation for food and manufactured products

 

So has the past 10 years been especially bad for property? I dont think so. And given our population density, we should get used to regular SARS and H1N1 scare.

 

And there is a big shoe yet to drop. Wikileaks confirmed what everyone else knew before. Saudi exaggerated the size of their oil reserves by 40%. A remake of the 70s movie "Oil Crisis" is akan datang.

 

 

hahaha.... ur theory and believes may make you the most unique investor... Anyway, i still believe that property is one of the safest investement in places like singapore. Like i said before, go n find a HDB owner who suffer losses by selling off their HDB after holding it for more than 15 yrs to prove your theory is correct. Otherwise, statistics and facts is still more convinving.

 

 

[Ben5266]

Im not too sure when is the peak, just answering Kusje question... he is the one mentioned 1997. My house was bought from open market. There wasnt any new flat at Yishun in 1997.

 

Anyway, I have never come across anyone in SG that loss money over HDB if he holds long enough. As for your example of bishan house that was bought at 1/2 a mill in 1996 and needed 15 yrs to break even... are u the owner or u just hear say from people?

 

from what i undestand, those who bought their HDB in 1996 should have earned around 20% to 30% over their purchase price by 4th quater of 2010. you may refer to the link below:

 

http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/...Document#Detail

No No No No No... Let me declare again.

I am one of those who bought in 1996, now... barely breakeven.

July-Sep 1996 was the peak before collapse.

I bought in March and the price went up another 10% before U turn.

So, those who bought in July-Sep might still be underwater. Ok, not every where but some places.

[Ben5266]

hahaha.... ur theory and believes may make you the most unique investor... Anyway, i still believe that property is one of the safest investement in places like singapore. Like i said before, go n find a HDB owner who suffer losses by selling off their HDB after holding it for more than 15 yrs to prove your theory is correct. Otherwise, statistics and facts is still more convinving.

There are 2 in this forum. Me and another guy, which I forgot his name already. We discussed this a few months back.

Anyway, main purpose of HDB is for shelter, not making money.

[Zangetsu77]

No No No No No... Let me declare again.

I am one of those who bought in 1996, now... barely breakeven.

July-Sep 1996 was the peak before collapse.

I bought in March and the price went up another 10% before U turn.

So, those who bought in July-Sep might still be underwater. Ok, not every where but some places.

 

You are assuming that now is the peak. The market will peak when nobody thinks it has. Seriously.

[Chengwh492]

You are assuming that now is the peak. The market will peak when nobody thinks it has. Seriously.

 

dont you see so many wanna-be-rich clowns around?

[Zangetsu77]

dont you see so many wanna-be-rich clowns around?

 

Personally i have little social interaction these days. Who are these wanna-be-rich clowns?

[Duckduck]

dont focus on short term bubble, focus on managing long term capital. if can hold watever asset long term, then forget abt short term bubbles. the real big returns come in the long term. anyone trying to time the bubble will likely lose instead of make $.